Stocks With Momentum: My E.G. Services Bhd

by **Cals** Thu 22 Jan 2015, 02:26

Stocks With Momentum: My E.G. Services Bhd

My E.G. Services Bhd ([You must be registered and logged in to see this image.] Financial Dashboard)
MYEG holds concessions for a variety of e-government services from various government departments to deliver government to consumer and business electronic services. The company started with providing services for theRoad Transport Department (JPJ) such as online driving licence tests and renewal of driving licences, and has branched out to provide insolvency searches, insurance and other services.
MYEG is in the limelight following the announcement of an expansion in the scope of its foreign workers permit renewal system on January 5, which will capture a large pool of recurring income.
From RM2.09 on January 2, MYEG saw its share price rise 29.2% to close at a 52-week high of RM2.70 just 4 days later on the back on increased trading volume. Incidentally, a one-for-one bonus issue by the company went ex-entitlement on the same day.
From RM47.7 million in FYJune2010, MYEG’s turnover rose to RM109.9 million in FY14. Its net profit jumped from RM20.9 million to RM50.1 million over the same period. Net margins have also risen over the years, from 37.61% in FY11 to 45.75% in FY14.
MYEG started FY15 with a slight q-to-q dip in revenue to RM27.7 million and a lower resulting net profit of RM12 million, attributed to the seasonality factor where demand for JPJ services decrease in the first quarter.
At RM2.48, MYEG’s shares are trading at premium valuations of 15.8 times book and a trailing 12-month P/E ratio of 55.6 times. Nonetheless, its growth prospects are strong as it offers services for products with large markets and recurring income, and continually adds on new services. The company has net cash position of RM14.6 million, which translates to 1 sen per share.
The Edge Research gives it a Fundamental score of 2.60 and Valuation score of 1.50, both out of 3.
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This article first appeared in The Edge Financial Daily, on January 21, 2015.